SK Hynix has bought between 10 trillion won and 40 trillion won of Korean corporate bonds this year, equal to roughly $7 billion to $28 billion, according to Bloomberg, which cited people familiar with the matter. The size of those purchases has turned the memory-chip maker into a heavyweight buyer in the country’s credit market.
Bloomberg said the scale is large enough to support liquidity across Korea’s corporate bond market. Local credit analysts quoted in the report have described SK Hynix as a new dominant force in the market.
Cash pile grows as the company adds treasury hiring
SK Hynix recently posted a job opening for a role covering the management, planning and hedging of corporate funds across government bonds, corporate bonds and short-term paper. As described in the report, the position looks closer to a securities firm’s proprietary treasury function than to a conventional finance desk at a chip manufacturer.
At the end of the second quarter, SK Hynix held 88 trillion won in cash and cash equivalents, up nearly 62% from the previous quarter. The report said that cash balance continued to rise even as the company kept increasing capital spending to expand output.
Asked about the investment activity, an SK Hynix spokesperson said the company is reviewing different operational approaches to keep fund management stable and efficient, but did not provide further details.
Analyst says such excess cash is unusual for a non-financial company
Yong-gu Cho, a fixed-income analyst at Shinyoung Securities, said companies usually park excess cash in banks. “It is very rare for an ordinary company to have this much idle cash. Now that the pool has grown, they need more hands to manage it,” he said.
In April, SK Hynix also said it would expand shareholder returns by 2026 through dividends, treasury shares and share cancellations. The report framed that as the company pushing more cash back into the market in two directions at once: shareholder returns and bond purchases.
Buying accelerated around April, with large ticket orders
Bloomberg’s reporting said SK Hynix’s orders started to increase noticeably around April. Typical trades were in the range of 100 billion won to 300 billion won per order. The company has mainly targeted investment-grade bonds rated AA or higher, with maturities generally under three years, reflecting a conservative approach focused on stability rather than speculation.
At the start of the year, its purchases were concentrated in one-year paper issued by public institutions and commercial banks. It later widened that scope to include bonds from credit-card companies, securities firms and state-backed issuers such as Korea Electric Power Corp.
The Seoul Economic Daily reported that SK Hynix bought 1.4 trillion won of credit-card company bonds in June. In early August, it also fully took up 1.26 trillion won of commercial paper issued by Mirae Asset Securities with maturities longer than two years. According to the report, the market interpreted that financing as preparation by Mirae Asset for acquisition funding. A memory-chip maker swallowing an entire securities firm financing deal in one shot is highly unusual in Korea’s bond market.
Support for liquidity is now colliding with supply constraints
The same buying pattern is also creating new strains. Korean outlet EBN reported that SK Hynix is now facing a shortage of eligible paper to buy, with high-quality corporate bonds being snapped up so quickly that buyers outnumber sellers.
Another Korean financial media tally showed net institutional purchases in the local bond market recently fell 41%. Against that backdrop, SK Hynix’s idle cash has acted as a major source of demand, filling part of the gap that would otherwise have been left to other institutional investors.
As described in the reports, SK Hynix’s purchases have supported liquidity in Korea’s credit market while also tightening supply in top-tier paper and pushing yields lower. That leaves less room for other issuers seeking funding and institutions trying to allocate into the same part of the market, while shifting supply-demand dynamics and pricing power toward a single large buyer.